What leverage is and why it is dangerous
Leverage does not improve your odds. It multiplies the profit, the loss, and the speed at which the money on your account runs out.
How it works
Leverage lets you open a position larger than your deposit. At 10x, a $1000 position requires $100 of your own funds — that amount is the margin, and the exchange temporarily provides the rest.
The result, however, is measured against the full position size. A 1% price move gives ±$10 on a $1000 position — that is 10% of your margin. Leverage multiplies gains and losses in exactly the same proportion.
Where the money runs out
When the loss on a position approaches the margin, the exchange force-closes it — that is liquidation. At 10x a move of roughly 10% against you is enough, at 25x about 4%, at 50x about 2%. The exact threshold depends on maintenance margin and fees, and it always arrives slightly earlier than the arithmetic suggests.
On the crypto market a 4% intraday move is ordinary. High leverage therefore turns normal market fluctuation into an almost guaranteed forced close.
How this looks in the interface
- Leverage is set on the exchange before the order is sent, as a separate request, for the chosen instrument.
- The maximum leverage is read from the exchange per instrument: presets above the allowed value are disabled, and an attempt to send an order above it returns a clear error before the exchange is contacted at all.
- Below the leverage presets you see the cash equivalent of the position and the margin — for example "≈ $305 · margin $61 (5x)". The Quantity field is expressed in the base asset rather than dollars, so this hint exists to keep the scale unambiguous.
A practical benchmark
It is sensible to start at 2–5x and with a position sized so that hitting the stop costs a small share of the deposit. A common risk-management benchmark is no more than 1–2% of the deposit per trade; at that size a run of several false signals does not knock you out.
Treat leverage as a way to avoid holding the whole deposit inside a position, not as a way to increase the result. If raising the leverage makes a trade feel more interesting, that is a sign the position size is wrong.